(1) This is an appeal with leave of this Court by the complainant, who alleged that the respondents were responsible for counterfeiting his trade mark in respect of bidis and selling them under the same.
(2) The complainant is a Depot Manager of Munshibhai Bidi Works doing their business at Poona, the proprietor being Abdul Hafeezhjan Abdul Azizkhan. Munshibhai Bidi Works have been using labels on the bidis with the portrait of the proprietor since the year 1932. Upto 1932 substantially the label was the same as is now being used but in the portrait there was a very small difference. After 1932 the same label is used and is produced at Ex. 12.
(3) It is alleged that the father of the accused, one Taranalal, started Chandrakant Special Munshi Bidi Works in about 1935-36, but, according to the complainant in 1936 Ratanlal came out with a label in some manner similar to that of Munshibhai Bidi Works Poona but it failed on the ground of limitation since the complaint was made after one year of the discovery of the offence. That made the accused jubilant and they advertised their goods in a way the show that they were manufacturing bidis in Poona.
(4) In February, March 1959 Munshibhai Bidi Works inserted advertisements in papers to the effect that merchants were counterfeiting their trade mark and therefore they had commenced affixing a tikli (a seal) of a particular design on their bidis. A little before this, i.e. in January 1958, they also applied for registration of the tikli as their trade mark under the Trade Marks Registration Act, 1940. The tikli was eventually registered by about the end of the year and the certificate of registration that was issued to them was made effective as from the date of the application. In or about, November 1958, accused Nos. 1 and 2, who had succeeded to the business of their father, started using the same tikli and also a label similar to the one used in Munshibhai Bidi Works Poona, without any attempt at disguise. The complainant came to know of this and conveyed the information to the proprietor of Munshibhai Bidi Works. The proprietor authorised the complainant to file a complaint in that behalf which was eventually filed. As a result of this complaint, goods from several dealers were attached as also from the works of accused Nos. 1 and 2; blocks from the printing press and goods lying with the agents of accused Nos. 1 and 2 in Poona were also attached. After the investigation was completed, these accused were charge-sheeted for offences under Secs. 482, 483, 485, and 488 of the Penal Code and under Section 6 and 7 of the Indian Merchandise Marks Act read with Section 34 of the Penal Code.
(5) Accused Nos. 1 and 2 are the proprietors of the Chandrakant Special Munshi Bidi Works, and accused No. 3 is the printer of the labels and the tikli for accused Nos. 1 and 2.
(6) The evidence in the case consisted of the complainant, some of the dealers from whom the goods were attached and the panchas in whose presence these goods were attached. The complainant produced the labels which were used by Munshibhai Bidi Works in 1932 and thereafter and also the Trade Marks Journal in which the tikli they had commenced using in 1957 was advertised. These labels and tiklis are as at Exs. 12 and 13 respectively. He also produced the certificate of registration issued by the Registrar of Trade Marks, the label used by the father of the accused in 1935 which formed the subject-matter of the previous prosecution, the labels and tikli which has now been introduced by them, and the pamphlets published by them in connection therewith. The labels and tiklis that are used by the accused and which are the subject-matter of the offence are as per Ex. 14 and Ex. 15.
(7) Accused Nos. 1 and 2 denied that they committed any offence. According to them, the photograph on the label (Ex. 14) is of their father Ratanlal. They stated that Exh. 14 was used by their predecessor-in-title since the year 1933 and was registered with the Registrar of Documents in 1937. They denied that it was an imitation of Exh. 12. They also denied that the complainant had acquired a right to use the tikli as trade mark or that they had imitated the same. They denied to have got the block article No. 7 made. They also stated that the complainant was not entitled to file the complaint and that it was time barred and it was also barred by the decision of the previous case.
(8) The learned Magistrate held that the labels were the same as those which formed the subject-matter of the previous prosecution. He them observes: 'In the present case there is absolutely no evidence to show that any customer of Bidis was deceived because of the use of the particular label by accused Nos. 1 and 2.' He further observed that the person who was alleged to have been aggrieved by the act of the accused was not examined nor was it shown that he had suffered any loss because of accused Nos. 1 and 2 using the particular labels on their bidi packets. According to him actually the aggrieved party should have come forward and placed his grievances before the Court. As regard the tikli, he says that Munshibhai Bidi Works had not acquired any right by any long user thereof. He also held that the prosecution was barred by time because labels were used since 1934. In the result he acquitted the accused.
(9) Mr. Patil has argued that there is no evidence that Exs. 14 and 15 are used by the accused. The question therefore, is whether the labels and the 'Tiklis' are used by the accused. The list of articles in the charge-sheet regarding the articles attached shows that they are being used by the accused. The accused have their works at 140, Shukrawar Peth, Sholapur. There was a raid at that place and following articles were attached (1) labels similar to Ex. 14 and 'Tiklis' similar to Exh. 15 in large numbers. (2) A memo dated 5-11-1958 for the order given by Special Munshi Bidi Works to Swastik Printing Press, Block Makers. (3) Memo given by Maharashtra Litho Press, Budhwat Chowk, Poona No. 2 for printing 5 reams (4) One big bidi bundle containing 20 bidi bundles of 25 bidies each having affixed multi-coloured 'Tikli' on the inner bidi bundles. Several of the witnesses, who have been examined in the case, also state that they have been purchasing bidies with these labels from either the accused or their stockists. There can be no doubt therefore that these labels and the 'Tiklis' were being used by the accused as stated by the complainant. The accused also do not deny having used them. We see no person to reject the evidence of complainant on this point.
(10) It appears to us that the learned magistrate has misunderstood the evidence in the case when he says that the labels in question were being used since 1934 and that they formed the subject-matter of the previous prosecution. (His Lordship reviewed the evidence and continued) His finding therefore that this very label was the subject-matter of the earlier prosecution and has been used since 1934 cannot be accepted as correct. As stated by us, it is not even the case of the accused nor is there any proof that the labels Exh. 14 were used by them except from the time stated by the complainant. We must therefore accept his evidence in Examination-in-chief, that it was only in about the month of November or just a little earlier that the accused started using the present labels Exh. 14 and the 'Tikli' Exh. 15
(11) The learned Magistrate's finding that so far as 'Tikli' is concerned the complainant had not be sustained. According to the case of the complainant, they started using it in 1957 and that is supported by the statement in the Trade Marks Journal at Exh. 22 and the advertisements in Newspapers (See Exs. 25, 26 and 27). They also applied for registration of the tikli as their trade mark in January 1958, and a certificate of registration was issued to them by the Registrar of Trade Marks in due course after he was satisfied that the tikli had attained a distinctive character by its association with the goods of Munshi Bidi words, as contemplated by S. 6 of the Trade Marks Act, 1940. Whatever may have been the position before the Trade marks Act, 1940, as decided by authorities, there can be no doubt thereafter. Section 21 of the Act says that subject to the provisions or Secs. 22, 25 and 26, the registration of a person in the register as proprietor of a trade mark in respect of any goods shall give to that person the exclusive right to the use of the trade mark in relation to those goods and, without prejudice to the generality of the foregoing provision, that right shall be deemed to be infringed by any person who, not being the proprietor of the trade mark or registered user thereof using by way of the permitted use, uses a mark identical with it or so barely resembling it as to be likely to deceive or cause confusion, in the course of trade, in relation to any goods in respect of which it is registered. The purpose of this section is very clear. Anyone whose trade mark is registered under the Act, becomes entitled as of right to the use of that trade mark exclusively subject to certain exceptions, one of those exceptions being as enacted in S. 25 which provides that if that trademark had been the subject-matter of proprietary use by another, before that day, then that other person's right would not be disturbed. He is also entitled, in the event of any infringement of the registered trade mark, to avail himself of the remedies specified in sub-section (2) of Section 21 of that Act. The reasoning, therefore, of the learned magistrate regarding 'Tikli' is erroneous and cannot be accepted.
(12) The next question is whether the labels and 'Tiklis' employed by the accused are counterfeit labels and 'Tiklis'. Before examining that question, relevant authorities may be considered at this stage. The general principle is:
'No man is entitled to represent his goods as being the goods of another man and no man is permitted to use any mark, sign or symbol, device or means, whereby, without making a direct false representation himself to a purchaser who purchases from him he enables such purchaser to tell a lie or to make a false representation to somebody else who is the ultimate customer'.
(Per James L. J., in Singer ., v. Prayang Narain . Cases of use of trade marks of others may arise under varied circumstances. But when counterfeiting in respect of the same kind of goods is alleged comparison of the two designs is the test. In Holdsworth v. M'Crea, (1867) 2 HL 380, Lord Westbury said:
'Now, in the case of those things as to which the merit of the invention lies in the drawing, or in forms that can be copied, the appeal is to the eye, and the eye alone is the judge of the identity of the two things. Whether, therefore, there be piracy or not is referred at once to an unerring judge, namely, the eye, which takes the one figure and the other figure, and ascertains whether they are or are not the same'.
Again in Payton and Co., v. Snelling Lampard and Co., (1901) AC 308 it is said:
'Whether a customer would be likely to be deceived is not a proper question to put to a 'witness, for it is for the Court and for the witness, to decide, after inspection of the exhibits and paying regard to the evidence, whether a customer would be likely to be deceived by the make-up of goods.'
In the case of Thomas Bear and Sons (India) Ltd. the Judicial Committee observe as follows:
'The question differs from the question whether a particular mark or name is an imitation or a colourable imitation of a mark or name used by the plaintiff. There the judge has before his eyes the materials for a decision; and in some cases it cannot be doubted that the judge can himself decide on the degree of resemblance or on the materiality of alleged differences of the marks of words'.
They refer to the cases North Cheshire and Manchester Brewery Co., v. Manchester Brewery Co., (1899) AC 83 and (1901) AC 308 and further say that
'if the decision of the Court of Appeal in London General Omnibus Co. Ltd., v. Lavell, (1901) 1 Ch 135, or some of the dicta in that case are contrary to these decisions, it cannot be relied upon'.
(13) In all cases where it is alleged that the same kind of goods are being passed off under a counterfeit trade mark, it is the duty of the Court to find out whether or not the mark is counterfeit having due regard to the similarity or otherwise of the marks and the circumstances connected with the case. It may also be mentioned that normally a customer does not see two similar labels or marks side by side - in order to make a comparison and note the difference between the two. It is only a general notion that he may have about the labels and the designs on them and when he is offered something as being the goods that he wants, he uses his ordinary recollection in order to arrive at a conclusion whether or not he gets the goods that he asks for. The principle in all these cases is, what is the effect of the particular trade mark on an unwary purchaser? And whether or not that purchaser would be deceived by the use of that particular trade mark? As observed by the Privy Council in the Coca-Colas case, Coca-Cola Co., of Canada v. Pepsi Cola Co., of Canada, 1942 1 All ER 615,
'the question for determination must be answered by the Court, unaided by outside evidence, after a comparison of the defendant's mark as used with the plaintiff's registered mark, not placing them side by side, but by asking itself whether, having due regard to relevant surrounding circumstances, the defendant's mark as used is similar (as defined by the Act) to the plaintiff's registered mark as it would be remembered by persons possessed of an average memory with its usual imperfections.'
There may be some difference in the designs and yet the court may come to the conclusion that the use of marks is calculated to deceive. (See Johnston v. Orr Ewing, (1882) 7 AC 219. It is this test which must be applied in considering the question at issue. No doubt, these cases were civil actions but having due regard to the language of the sections used in the Indian Penal Code, it is abundantly clear that the test is the same. The sections do not require that the user of the mark must actually defraud anyone; the use must be reasonably calculated to cause any person to believe that the goods so marked or any goods contained in any such receptacle were of a nature or quality different from the real nature.
(14) (His Lordship compared the labels and proceeded.) Considering the standards laid down by authorities we have no doubt that the labels of accused Nos. 1 and 2 are so similar to those of Munshi Bidi Works that they are reasonably calculated to deceive within the meaning of the relevant sections of the Penal Code.
(15) Similarly, there is a great deal of similarity in the 'Tikli' (Exh. 13) used by the complainant and the 'Tikli' Exh. 15 used by the accused except for a slight difference in colour, in Exh. 13 it being yellow and in Exh. 15 yellow with a very slight tinge of green. The rest of the designs cannot be distinguished. In regard to the 'Tikli' Exh. 15 also, it cannot be doubted that it was calculated to deceive.
(16) There can be no doubt that these labels were used by the accused with the intention required under Section 480. The question of intention must depend on the circumstances of each case. (His Lordship referred to the circumstances and proceeded). We must, therefore, hold that these labels and 'Tiklis' were copied and used by accused Nos. 1 and 2 not only calculating that their goods would pass off as those of Munshibhai Bidi Works but with an intention to defraud the customers.
(17) It is no doubt true that no evidence of any of the customers to this effect is led. Mr. Patil has read the evidence of the dealers and he states that they say that none of them tried to pass off the goods of the accused as the goods of Munsibhai Bidi Works. We wonder if any dealer who does this would admit that he is committing a crime; if he did, he would be equally guilty with the accused or probably more. Even if the mark enables a dealer in the goods of the accused to pass them off as the goods of Munshibhai Bidi Works, the accused would be guilty. The learned Magistrate's view that the person aggrieved by the use of the mark must come personally before the Court seems to be based on a misapprehension of the ratio of the case in Ruppell v. Ponnuswami Tevan, ILR 22 Mad 488. We are accordingly of the view that all the ingredients of the offences charged against the accused Nos. 1 and 2 are made out and therefore they are guilty of these offences. They are also guilty under Secs. 6 and 7 of the Indian Merchandise Marks Act.
(18) With regard to accused No. 3, the block was seized from his press. Accused No. 3 says that he did not know that the label Exh. 13 was a registered trade mark and that he believed that it was not a trade mark at all. He says that he did not know that the complainant was using such a mark. Articles 7, 8, 9 and 10 were attached at the time of the raid from his possession. We have no doubt that what was given to him for the block was the 'Tikli' of the complainant and not a design prepared by an artist. He is directly guilty of counterfeiting the trade mark under Secs. 483 and 485 of the Penal Code, and for the other offences read with Section 34.
(19) We reserve the question of sentence until after the reopening.
(20) 17th January 1961. In this case both the accused Nos. 1 and 2, who are now the owners of the firm, are responsible for counterfeiting the trade mark. The evidence as discussed above also shows that this is not a solitary act and the act is not done by any error but is deliberately designed for the purpose of affecting the complainants in their business. Mr. Patil has cited the case of Giridharilal v. Emperor, : AIR1936Pat579 , and contend for a small fine. With respect, it is impossible to agree with the reasoning of the learned Judges for imposing a smaller fine. No protection can be afforded if persons are let off with light fines for such offences. There may be cases when the offence is committed inadvertently in which case a small fine may be justified. When, however, there is systematic policy of pursuing another in using his trade mark it becomes a different matter. Under these circumstances we think that interests of justice will be served by directing each of the accused Nos. 1 and 2 to pay a composite fine of Rs. 25000/- for counterfeiting the label as well as the Tikli.
(21) We accordingly direct that each of the accused Nos. 1 and 2 pay a fine of Rs. 2500/- for the offences under Secs. 482, 483, 485, 486, 488 read with Section 34 of the Indian Penal Code. It is not necessary to impose a separate sentence under Ss. 6 and 7 of the Indian Merchandise Marks Act. It default of payment of fine each of them to undergo simple imprisonment for six months.
(22) So far as accused No. 3 is concerned, we have disbelieved his defence. Under these circumstances he is also liable but in a lesser degree. We accordingly direct him to pay a composite fine of Rs. 500/- for offences under Ss. 483 and 485 and do not impose a separate sentence for the offence under Ss. 482, 486, 488 read with Section 34 and under Ss. 6 and 7 of the Indian Merchandise Marks Act. In default he should undergo simple imprisonment for one month. Three weeks' time is given for paying the fine.
(23) All the goods with the counterfeit labels to be destroyed.
(24) Order accordingly.